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From: Lance (Fun to Be Cutting Edge and Ahead of the Game)
Date: 28 Nov 2003
Time: 21:11:30
Mobile Oil Change Industry maturing at a snails pace? Mobile Oil Change Industry maturing at a snails pace? Why? There are many reasons for this. The biggest reasons are labor, marketing, traffic and high costs within the confines of smaller economies of scale. Well at least this is how I see it. One operator was quoted in the National Oil and Equipment News as saying in this business you go get the customers, not let them find you. Another said they had a special “Blitz” program, which included flyers as inserts in newspapers, follow up phone calls, direct sales etc. Others had concluded that they business needed telemarketing, brochures, flyers and face to face sales calls. Virtually these comments were correct. One company in OKC said they had accounts such as FedEx, Oklahoma Natural Gas, Wells Fargo, Enterprise Rent-A-Car, Bell Creameries, Vending Companies, Small municipalities (ambulances, police and fire), Brinks. It appears from this particular article that most of the companies out there are in line with our thinking that personal car market is much tougher due to travel while the fleet market was higher profit. Obviously. One operator in CA said he preferred a 70% fleet, 30% personal market mix distribution. We agree that this makes more sense. Like the Car Wash Guys is generally 60-40 split. http://www.truckwashguy.com VS http://www.Detailguys.com . Valvoline employees in a suggestion box program called “Future Quest” had idea to go mobile? Wow, big brain storm, maybe they went online and saw us? Whatever, anyway this Valvoline program is doing okay in Lexington and Louisville and wants to expand into Cincinnati, OH next. Project Valvoline onsite. Those people should just get smart and hire us? Oh well? It is appalling to me to see great companies move so slow, waste so much and innovate so slowly. There great brain storm is to copy us? Well for God’s sake do it, do not talk about it. The roll out includes two cities? Please spare me. Unless you have GE, Sprint type sales force or WashGuys Blitz Team Forget it. Although I do hand it to Valvoline they signed up 500 vehicles in the first 30 days well for a company that size throwing a few dollars around can do that, but five hundred customer vehicles in 30 days is not overly significant. I think we did some 460 units for truck washing in Louisville in 8 days with one salesman, it might be a little more, I would have to check on that. We like Vehicare out of Virginia for a company that understands the game. http://yesvirginia.org/news/news.aspx?newsid=233 Of course we are partial to ourselves: http://www.OilChangeGuys.com . The survey by NOLN was good stating that the average mobile lube operator still in business has been in business 5.4 years although how many have gone out of business? We talked to one operator in Las Vegas who had over 10 operators come and go within the past few years that he knew about, he runs three vans for the last seven years. Average prices? Cars: $30.00 . Heavy Trucks: $143.00 . Costs: $8.53 cars, trucks $ 50.25. Operating radius 74 miles on average, that is pretty large and scary. Average company has about 42 fleet accounts, which makes sense because to stay in business means you need that many. Average fleet size is 38 2 which is typically what we have found, but this means that many operators are missing out on the 4 flower Van fleets or 5 pizza delivery vehicles, because they are simple, fast, no time specialty schedule and easy as pie. The average cost of a van is 27,000 dollars, which seems correct. Interior guts is $5,000 but we find this to be in error or best of wishful thinking by the over 400 companies doing the survey. Our cost much more: http://www.oilchangeguys.com/nw6.shtml as you can see on these drawings that there is a little more to it. Also realize that the competitors we have seen have much more into their units than the average purported amounts: http://www.oilchangeguys.com/nw8.shtml and http://www.oilchangeguys.com/nw5.shtml . Average cost of insurance ranks close to the cost to insure a car wash rig at” $1800 per year. Generally the rigs operate with one or two crew members who are paid about $12.00 per hour or more. About one third of the companies require certified operators us included through either: AOCA, ASE or the brand of oil they use, in-house training. 54% use vans like us, 15% use pick-ups, 23% use trailers. Some use more than one like us. 55% do heavy equipment. Like the ones pictured here: http://www.TractorWashGuys.com . Most all mobile operators offer windshield wipers, air filters, coolant, Fluid Exchange, bulb replacement and do tire rotation. 53% do differential fluid, 35% do brakes, 24% do windshield repair. The average industry profit margin in the survey by National Oil and Equipment News was said by their magazine to be 31%. Although if your costs of labor and supplies are nearly 60% we have to question that number. Only 7% of the operators said they made 200K in gross. 38% between 50-100K. Most customers came from word of mouth, flyers, vehicles signage and cold calling. Yellow pages only 18% of customers coming in from. Internet drawing only 1%, which means bad web usage. 73% use synthetic oil of some type when customers ask. 77% bought bulk oil. For personal cars the average oil change was right around 4,000 miles, which is less than normal probably due to proactive data control and personal scheduling. Good article with good insight from NOLN. We cannot vouch for any data in the survey, unless we specifically mentioned it herein. Lance@carwashguys.com
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